After many rounds of deliberations and at least two Law Commission Reports separated by more than a decade (Report 176 in 2001and Report 246 in 2014), the Arbitration and Conciliation Act, 1996 was finally amended on 23 October 2015 by way of an ordinance. The ordinance route was justified on grounds that the amendments were urgent to send the right message about Indian government’s intentions of making the necessary legal reforms for ease of doing business in India.

ABSTRACT: Is India poised to be the next international arbitration hub? This paper suggests that it could,
but needs some course correction. The authors present a hypothesis that the seat theory of arbitration is undergoing a dialectical evolution. In this process, it is using the transnational theory (as its negation) to evolve into a more capable concept to tackle the challenges of modern international arbitration. India needs to create appropriate jurisprudential ecosystem to allow it to participate and contribute in this next phase of international arbitration’s evolution, rather than play catch-up, as it did in the past. Recent debates on false premises such as two Indian parties’ liberty to choose foreign seat and inventing a flawed concept of seat in domestic arbitration point to certain concealed conceptual landmines that must be deactivated at the earliest.

India’s dispute with Vodafone has been one of its most publicized and long pending disputes with a foreign investor. Despite attempts at conciliation, parties remain locked in international arbitration under the relevant BIT. It may not be hyperbole to suggest that India’s approach to this dispute effectively defines its attitude to investor protection, at least so is the perception Therefore, when it recently chose to obtain an ex-parte injunction against Vodafone from starting an arbitration under UK-India BIT from a domestic municipal court (Delhi High Court), it came as a surprise to many.

In HRD Corporation v Gail (India) Ltd. (decided on August 31, 2017), the Supreme Court held that for any infraction of section 12(5) read with the Seventh Schedule of the amended Arbitration and Conciliation Act, 1996 (the “Act”), recourse to section 14 of the Act would be available and the court would have the power to terminate the mandate of the arbitrator in such cases. It clarified that this remedy would be available only with respect to the question as to whether the arbitrator was “ineligible” under any ground listed in the Seventh Schedule. As to the grounds relating to independence and impartiality listed in the Fifth Schedule, the Court held that the challenge procedure under section 13 of the Act would be the exclusive remedy.

A recent reported judgment, Voestalpine Schinen GmbH vs. Delhi Metro Rail Corporation (2017) 4 SCC 665, makes an interesting read. Of course, it is one of the first decisions of the Supreme Court interpreting the amending provisions in S. 12 of the Arbitration and Conciliation Act, 1996 and must be of interest – but it is of even more significance because of what the court orders without reference to the dispute before it.

In brief, the controversy was simple – and would be recurring in the Indian PSUs context. The arbitration clause provided that a three member tribunal would be selected in the following fashion: DMRC would maintain a panel of arbitrators – serving or retired engineers of government departments or of public sector undertakings. It would send a name of 5 from the panel to Voestalpine to select one, after making its own selection from that 5. The two so chosen will then select the third from the same 5 names. Continue reading “Appointment of Arbitrators: SC battling self created demons?”

This was the first international research initiative by Society for Research in Law [SRIL], a student-based organization [a society registered under Societies Registration Act, 1860], whereby comments and suggestions were submitted to the Indian government on the Model Text for Indian Bilateral Investment Treaty released for public comments.The report provided an in-depth research and analysis of the Model Text from international investment law perspective. The report addresses both issues relating to policy concerns surrounding foreign investor protection as well as the legal and interpretational issues likely to arise in light of the provisions of the Model Text.

The 1996 statute which has been subject of much criticism, sometimes unfairly overstated, has finally been amended through an ordinance which was promulgated on Friday, 23 October. The ordinance is available here.

An amendment has been in the pipeline for longer than one might think, with the first law commission recommendation to amend the 1996 Act coming way back in 2001.

The second attempt began in 2010, eventually leading to another law commission report and recommendation for a new set of amendments proposed about a year ago. The intervening 15 years had seen a complete change in how arbitration was viewed by the courts and by the policy makers in India, and that is reflected in the approach the two law commissions took – one in 2001 and the other in 2015.